Acct 405 Exam 6 | Actual study |
Questions and Answers
accuracy, valuation, and allocation - ANSW-Recomputing the unexpired portion of insurance policies in
effect tests which of the following assertions for prepaid insurance?
high - ANSW-auditor typically sets inherent risk for intangible assets at this level:
accuracy, valuation, and allocation - ANSW-In auditing intangible assets, an auditor would determine if
the valuation model used by the specialist is appropriate and consistent with GAAP in support of
management's financial statement assertion of:
accuracy, valuation, and allocation - ANSW-Testing depreciation calculations for a sample of property,
plant, and equipment tests the assertion of:
testing goodwill for impairment - ANSW-Complex accounting issues for property, plant, and equipment
include all of the following except:
authorization and approval of major fixed asset additions - ANSW-To achieve effective control over fixed
asset additions, a company should establish activities that require:
tests of controls and limited tests of current year property and equipment transactions - ANSW-When
there are numerous property and equipment transactions during the vear, an auditor planning to set
control risk at low usually plans to obtain an understanding of internal control and to performs:
inspect public records of lien balance - ANSW-Several years ago, Conway, Incorporated, secured a
conventional real estate mortgage loan. Which of the following audit procedures would least likely be
performed by an auditor examining the mortgage balance?
authorization - ANSW-A control which ensures that long-term borrowing is property initiated by
appropriate individuals is an example of what type of content:
the number of transactions is smallthe number of transactions is small - ANSW-substantive strategy is
typically used to audit stockholders' equity because:
retained earnings - ANSW-In the audit of a medium-sized manufacturing concern, which one of the
following areas can be expected to require the least amount of audit time?
completeness - ANSW-Reviewing interest expense to examine payments to debt holders not listed on
the debt analysis schedule is a procedure that can be used to test the audit assertion of:
batch processing of checks - ANSW-The least crucial element of internal control over cash is:
existence, rights and obligations, and completeness - ANSW-In confirming with an outside agent, such as
a financial institution, that the agent is holding investment securities in the entity's name, an auditor
most likely gathers evidence in support of management's financial statement assertions regarding:
verify reconciling items on the entity's bank reconciliation - ANSW-An auditor who is engaged to examine
the financial statements of a business enterprise will request a cutoff bank statement primarily to:
confirm the number of shares owned that are held by an independent custodian - ANSW-In establishing
the existence and ownership of a long-term investment in stock of a publicly traded company, an auditor
should inspect the:
examining customer confirmation replies - ANSW-When auditing contingent liabilities, which of the
following procedures would be least effective?
Questions and Answers
accuracy, valuation, and allocation - ANSW-Recomputing the unexpired portion of insurance policies in
effect tests which of the following assertions for prepaid insurance?
high - ANSW-auditor typically sets inherent risk for intangible assets at this level:
accuracy, valuation, and allocation - ANSW-In auditing intangible assets, an auditor would determine if
the valuation model used by the specialist is appropriate and consistent with GAAP in support of
management's financial statement assertion of:
accuracy, valuation, and allocation - ANSW-Testing depreciation calculations for a sample of property,
plant, and equipment tests the assertion of:
testing goodwill for impairment - ANSW-Complex accounting issues for property, plant, and equipment
include all of the following except:
authorization and approval of major fixed asset additions - ANSW-To achieve effective control over fixed
asset additions, a company should establish activities that require:
tests of controls and limited tests of current year property and equipment transactions - ANSW-When
there are numerous property and equipment transactions during the vear, an auditor planning to set
control risk at low usually plans to obtain an understanding of internal control and to performs:
inspect public records of lien balance - ANSW-Several years ago, Conway, Incorporated, secured a
conventional real estate mortgage loan. Which of the following audit procedures would least likely be
performed by an auditor examining the mortgage balance?
authorization - ANSW-A control which ensures that long-term borrowing is property initiated by
appropriate individuals is an example of what type of content:
the number of transactions is smallthe number of transactions is small - ANSW-substantive strategy is
typically used to audit stockholders' equity because:
retained earnings - ANSW-In the audit of a medium-sized manufacturing concern, which one of the
following areas can be expected to require the least amount of audit time?
completeness - ANSW-Reviewing interest expense to examine payments to debt holders not listed on
the debt analysis schedule is a procedure that can be used to test the audit assertion of:
batch processing of checks - ANSW-The least crucial element of internal control over cash is:
existence, rights and obligations, and completeness - ANSW-In confirming with an outside agent, such as
a financial institution, that the agent is holding investment securities in the entity's name, an auditor
most likely gathers evidence in support of management's financial statement assertions regarding:
verify reconciling items on the entity's bank reconciliation - ANSW-An auditor who is engaged to examine
the financial statements of a business enterprise will request a cutoff bank statement primarily to:
confirm the number of shares owned that are held by an independent custodian - ANSW-In establishing
the existence and ownership of a long-term investment in stock of a publicly traded company, an auditor
should inspect the:
examining customer confirmation replies - ANSW-When auditing contingent liabilities, which of the
following procedures would be least effective?
